Tuesday March 18, 02:55 PM
US housing starts slip 0.6 percent
WASHINGTON (AFP) - US housing starts fell 0.6 percent in February, the government reported Tuesday in a sign of more pain for the troubled real estate market.
Yet some analysts said the report contained signs a bottom may be near for the weakest link in the US economy.
The Commerce Department said construction starts were at a seasonally adjusted annual rate of 1,065,000 -- a year-over-year tumble of 28.4 percent.
The report was better than the average analyst estimate of a pace of 995,000 starts but still underlined the meltdown in the real estate market that has pummeled the world's biggest economy.
However the January figure, which showed a surprise increase, was revised upward in the latest report to a pace of 1.071 million.
New construction of single-family homes, a more stable indicator of new-home trends, fell 6.7 percent to a 707,000 pace, their lowest since January of 1991.
Building permits for new-home starts in February -- a sign of future activity -- were down 7.8 percent to a pace of 978,000 units, the lowest since September 1991.
Marie-Pierre Ripert, economist at Ixis Corporate and Investment Bank, said the news from housing was mixed.
"Even if the relative stabilization in housing starts since the beginning of the year could appear as goods news, we expect housing starts to trend downward in the months ahead as building permits have continued their fall," she said.
But Joel Naroff of Naroff Economic Advisors said there were some glimmers of hope in the data.
"While home construction did ease back, the pattern over the past three months seems to point to a bottom slowly being formed," he said.
"I have commented over the past couple of months that I wouldn't be surprised if by summer the worst in construction would have passed and that possibility is rising."
Patrick Newport, economist at Global Insight, said the painful adjustment in housing is not quite over but is getting closer.
"Drops in home prices and housing starts are the adjustments that will bring inventories down," Newport (NASDAQ: NEWP - news) said.
"Our view is that the adjustments will come sooner rather than later, and that we are likely to see further ugly single-family housing starts numbers over the next three to six months, but then a rebound -- provided financial markets stabilize -- in the second half of this year."
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